One of the Criticisms of Average Cost Regulated Pricing of a Natural

question 58

Multiple Choice

One of the criticisms of average cost regulated pricing of a natural monopoly is that the firm

• A)has no incentive to hold costs down.
• B)must bear losses continually.
• C)will retain positive economic profits.
• D)produces more output than is resource-allocative efficient.

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Definitions:

Joint Goal

An objective or target shared by two or more parties who are working together to achieve it.

Poison Pills

A strategic approach adopted by corporations to fend off hostile takeover attempts by rendering themselves less appealing to the interested buyer.

Strategic Fits

The degree to which the strategies and operations of two or more businesses or units complement and reinforce each other.

Acquisitions

The process of obtaining control of another company by purchasing or exchanging shares.